| Publication Date: January 17, 2008 Bulletin ID: DLB-08-03 Summary: Two Important Reminders About Unbooked Loans Posted on 01-17-2008 Dear Direct Loan Colleague: At the 2007 Federal Student Aid Conferences, the Direct Loan Operations Team informed schools about a processing change related to unbooked loans that will begin March 15, 2008. This bulletin discusses this change in more detail and reminds schools about the unbooked loan monitoring process that started in July 2007. Unbooked Loan Monitoring Reminders In Direct Loan Bulletin 07-11 posted on June 13, 2007, the Direct Loan Operations Team informed schools of additional school monitoring procedures that included unbooked loan balances greater than 30 days. Specifically, a school with an unbooked loan balance greater than 30 days will receive the following communications: - Weekly School Monitoring e-mails with the school's unbooked loan balance(s) and phone calls from the Common Origination and Disbursement (COD) School Relations Center offering assistance with the current outstanding loans.
- A letter advising the school 1) of a change to its processing option and 2) that the Direct Loan Operations Team will freeze all future funding requests if the unbooked loan amounts have not been resolved within 45 days of the letter.
Processing Change for All Direct Loan Schools Effective March 15, 2008 Beginning with the COD System implementation currently planned for March 14-15, 2008, Federal Student Aid will change the "Disbursements Funded Without Accepted Pnote" option flag in the COD System to "N" for all schools for all award years. This option change means that all schools must have a valid MPN accepted and on file in the COD System before actual disbursements will be accepted. What is the impact to Advanced Funded schools? This processing change will not impact an Advanced Funded school's ability to receive funds from G5, the Department's payment system, or disburse funds to its borrowers (assuming the signed MPN is in the school's possession). This processing change only means that actual disbursements [Disbursement Release Indicator (DRI) equals "True"] will not be accepted until the MPN is accepted in the COD System. What is the impact to Pushed Cash schools? This processing change will not impact Pushed Cash schools because MPNs are already required to be on file before actual disbursements are accepted. How does a school reduce the number of rejected disbursements due to no MPN being on file? There are several processing options and tools available to schools to help mitigate rejected disbursements. The options and tools outlined below are intended as suggestions and may not work for all schools. - Verify that the school's promissory note processing option is set to use the multi-year feature of the MPN. Processing as a multi-year school allows the school to use an MPN previously signed by the borrower and increases the chance of an MPN already being on file.
- Sign up to use the Electronic Direct Loan Master Promissory Note and encourage borrowers to sign their MPNs electronically whenever possible. This process greatly reduces errors and processing time.
Note: Although we encourage use of the electronic MPN process, we understand that it is not practical in all situations or with all borrower populations. In addition, if a borrower specifically requests a paper MPN, then he or she must be provided a paper MPN.
- Mitigate issues that may be associated with paper MPN processing as follows:
a. | Choose to use a mailing method that guarantees faster delivery (overnight mail, DHL, FedEx, etc.). This also allows for better tracking of MPNs sent to the Department of Education (the Department). | b. | Verify that all the data are correct on the MPNs and that the associated manifest is complete and correct before submitting the package to the Department. Verify use of the correct address (regular mail or overnight). | c. | Refer to DLB-07-21 updated on November 13, 2007 for additional paper MPN acceptance guidelines. |
- Use COD Common Record acknowledgments to determine whether loans are linked to MPNs.
- Use or create internal school reports to query the school's system for unbooked loans. If there is no internal report to identify unbooked loans, discuss possible parameters for such a report with the school's software vendor or system programmers.
Note: A school that uses EDExpress software can use several List reports (for example, List-Status or List-Actual Disbursement, Unbooked Only).
- Use monthly reports sent by the COD System. Every month, the 30-Day Warning Report and the School Account Statement can be used to review unbooked loans. For more information about these reports, refer to Volume VI, Section 8 of the 2008-2009 COD Technical Reference.
- Contact the COD School Relations Center at any time for assistance.
If you have questions about the information contained in this bulletin, please contact the COD School Relations Center at 800/848-0978 or by e-mail at CODSupport@acs-inc.com. Thank you for your ongoing partnership in the Direct Loan Program. Sincerely, William Leith
Acting General Manager, Application, Operations and Delivery Services |